Deutsche Bank and Barclays would be among the institutions that would have to keep more easy-to-sell assets in the U.S. and face restrictions on distributing capital to parent companies. The Fed provided $538bn of emergency loans to the U.S. units of European banks during the financial crisis, almost as much as it did to domestic firms. That increased political pressure on lawmakers and regulators to tighten rules for all lenders.

'This is a huge paradigm shift in U.S. regulation of foreign banks operating here', said Kim Olson, a principal at Deloitte & Touche LLP in New York and a former bank supervisor. 'This means captive capital and liquidity in the local unit that U.S. regulators can go after during failure'.